Waiting for something better

Even with helpful new mobile wallet developments, consumers and retailers stay on the sidelines.

A friend of mine intends to keep his gasoline-powered car until he can buy one that uses some form of renewable fuel. Sometimes I have the same attitude about my wallet. My current one, which I picked up in Paris some years ago, does the job well enough. It holds my driver’s license, some family photos, my cash and credit cards. I’ll keep it until the next wallet incarnation, which may be a digital one stored on a smartphone, can replicate all those functions.

That day may be drawing nearer. Isis, a smartphone-based digital wallet backed by AT&T Mobility, T-Mobile USA and Verizon Wireless, this week said four point-of-sale terminal makers will support the Isis digital wallet in its devices. And, Google Inc. says Sprint, which currently is the only U.S. wireless carrier offering a smartphone-based digital wallet to consumers, will add support for Google Wallet to at least 10 smartphones. Currently, only the Nexus S 4G phone from Sprint has Google Wallet. Consumers can use a digital wallet to buy items inside stores.

Near field communication is integral to Google Wallet and is expected to be part of Isis. NFC is a two-way wireless connection that enables devices to send data back and forth. For example, a tap of an NFC smartphone against an NFC payment reader not only could send the user’s payment data to the device, but deliver a coupon to the digital wallet. NFC requires that payment terminals, such as those offered by the four terminal vendors above, have compatible hardware and software built in.

Some digital wallets, like Square Inc.’s Card Case, do not use NFC. Instead, the retailer signs up to accept Square and the consumer pays by giving the salesperson her name. The consumer’s photo, registered through Square, appears on the point-of-sale system to verify the consumer’s identity. The consumer controls the payment method via the Card Case app on her smartphone.

Both methods are appealing, but they’re just not enough to persuade me they can replace my wallet. I suspect retailers, too, will keep using what works, the venerable magnetic-stripe payment card. The technology has become so good that I’m still putting away my card when the receipt begins to print. And, with the advent a few years ago of no-signature-required for transactions of less than $25, the checkout process when paying with a card even became quicker.

For the retailer, the speed translates into a better ability to move more consumers through the checkout process. More consumers means more money.

And for me, that’s where digital wallets really have to excel. There has to be some tangible reward for using them. It can’t just be a “wow” factor. Digital wallets have to offer more convenience for consumers and retailers to have any chance of widespread adoption. Until that is figured out, I’ll keep my trusty wallet.